Why a shift to ebooks imperils libraries

It isn’t because libraries can’t figure out, technically, how to loan out ebooks. It’s because publishers don’t want them to, and may be able to prevent it.

A shift to ebooks has been predicted for a while, and seems to be happening. I’ve talked to many people who wonder why their public libraries don’t offer more ebooks they can download on their e-reader of choice, assuming it’s because the public libraries don’t want to, or are not technically competent to. The first is, i think, definitely no longer true — libraries want to. The second, technical competence, may be a barrier, but it’s not the prime one.

The prime barrier is that publishers by and large don’t want libraries to. I don’t think most library patrons realize the threat to libraries here — I think it’s high-time library organizations like the ALA start educating them. Most people like public libraries and want them to continue; a public that realizes they may be threatened will be more likely to support policy to make them do so, and that’s what’s needed.

With a print book, a library can buy a book and loan it to as many borrowers as they like, without any permission from the publisher at all. In the US, the right to do this is protected by the first sale doctrine.

That does not apply to ebooks. I do not have the right to buy an ebook and loan it out again. I need the publisher’s permission — I may also need enabling technology to make it possible, vs Digital Rights Management that actively seeks to prevent it (and the DMCA which makes it illegal to violate that DRM technology). A publisher can charge dearly for that permission, or withhold it entirely. With a print book, a publisher might still be worried that being able to borrow for free from a library can hurt sales — but they can’t do anything about it. With an ebook, they can do something about it, the balance of powers has shifted tectonically in favor of publishers.

Here’s an account by Patrick Berry of California State University Chico on the difficulties in running a kindle lending program. Patrick investigates the feasibility of loaning out actual physical kindles loaded with titles purchased by the library — this used to be somewhat feasible, but recently Amazon made technical changes that require a purchased title to be registered to a particular kindle device when purchased, and only readable on that device. Actually, to be fair, Amazon allows up to six devices to be registered for a title. But if a library wants to purchase more than six physical kindle devices, then a given title they purchase they can only load on six of them, unless they buy multiple copies. Note that this isn’t only six at once , it’s only six specific physical devices, pretty much ever.

What if you instead of loaning out actual physical kindles, a library wanted to loan out kindle titles for patrons to load on their own kindles? Well, that same restriction makes it impossible for a library to simply buy the book normally at a normal rate and loan it out themselves directly to patrons (as libraries do with print books). Now, you may have heard that Amazon recently announced a program with Overdrive to support library lending. The details of this program are vague and don’t seem available on the open internet. It seems likely to me that not every title available for kindle is in the Overdrive library program, probably only titles that publishers opted in to. (Compare to ordinary print books, where a library can buy any book at all and lend it out). Likewise, it seems likely that libraries pay more over the lifetime of use for a kindle Overdrive title than they would for a print title. I don’t know what the library pricing model is here, and would be very very curious if anyone does — does a library pay an up front ‘purchase’ fee, is it more than the usual kindle purchase fee? Does the library pay a per-checkout fee as well? (something a library does not do with a print book, and there’d be no way for a publisher to require it).

Libraries can offer ebooks, unlike print books, only at the sufferance of publishers, and publishers may charge whatever they like for this ‘privilege’. Publishers, not liking the idea of libraries much, are not providing that permission in some cases, and are providing pricing models in other cases which make it much more expensive for a library to offer an ebook than a print book. If reader preferences continue to shift to ebooks as we expect, we may very well see the end of libraries as book lending institutions. (That’s of course not all a library does, and they may continue in other roles). Not because patrons don’t want to borrow ebooks from a library same as they did print ebooks, not because libraries don’t want to loan ebooks or can’t figure out the technology, but because publishers simply don’t want it to happen, and our laws give them the right to prevent it.

28 thoughts on “Why a shift to ebooks imperils libraries”

Oregon uses Overdrive which allows lending of ebooks in pretty much any supported format. Essentially, a consortia of libraries within the state purchase access to Overdrive and pay for group access. Libraries within the group can “buy” digital copies just for their own patrons within the Overdrive platform. I’ve used it a few times and it works really well. I have two principle issues.
1) Overdrive lends books like the physical library. The consortia only has x number of times a book can simultaneously circulate, and those that want to use the book, then end up on a wait list. For a large consortia, this means that popular titles can take sometimes months to get access too. In this case, it’s much easier to just buy the book or try and convince your library to purchase their own digital copies (which doesn’t happen often because this is actually pretty expensive. I’m on the library board for my local library, and the I think you purchase access to individual titles in $1000 blocks [but I can’t be positive of that], which is pretty darn expensive).
2) I’m not particular wild with the Amazon arrangement because users that download Overdrive books to their Kindle automatically have a link generated on their Kindle that links to Amazon for purchasing the book. If your book expires before you finish reading it, you get pushed to Amazon to purchase the book. Essentially, libraries become a new purchasing channel for Amazon but as far as I know, libraries do not receive any affilliate benefits for driving users to Amazon.

However, I will admit, on the whole, I’ve found that Public Libraries tend to be doing a better job figuring out how to deal with ebooks. I’m not sure if this is because their primary audiences are interested in a narrower set of content (popular fiction/nonfiction) versus the specialized nature of content researchers require or if it’s something else entirely.

Interesting, Terry. Do you know if the price the consortium pays for a title is the same as the ordinary retail price, or different? Other than purchasing titles, is there a monthly fee of some kind, or a per- checkout fee?

One-checkout-at-once-per-title is at least the same model as print books. Public libraries have trouble buying enough print copies for current best sellers too, some libraries use services where the library can essentially rent a lot of copies of best sellers, returning them when they are no longer popular, on to the next.

“Essentially any format” for Overdrive means any format with good DRM, right?

I can only answer some of these questions…libraries pool funds together to pay annual for access to the Overdrive library. For libraries looking to buy their own access copies — I’m not certain if it’s a one time fee or annual fee. I’m looking through my board notes (because we discussed this a couple months ago) and I believe it’s a one time fee (which I’d guess is why it’s so high). So, no, the consortia at present doesn’t use a pay per circ model — it’s an annual fee to access a specific Overdrive set of offering. OSU purchases ebook titles, and these we pay an annual fee for, with a purchasing requirement once an ebook has been circulated x number of times.

When I say essentially any format, I should qualify — essentially any supported format by the current crop of e-readers, but yes, that does include a DRM component that enforces a checkout period.

Hmm, annual fee, okay. That is of course different than the way you buy print books (one time purchase, no annual fee), and also (yes?) differet than how consumers buy kindle books, also a one-time purchase with no annual fee.

The difference is of course, is that the corpus of books available via Overdrive is often times larger than some of the public libraries that participate in it (and continues growing). Though, in our case, the availability of popular items really is an issue.

You have more books available through Overdrive from the consortium than in a particular library. There are probably also more PRINT books available from the consortium than in a particular library too — most consortiums have consortial ILL agreements. So that’s not neccesarily the main difference, you always have more books available through consortial sharing than you have locally.

The print books you’ve got to put in a request and wait for a courier though. The ebooks are available right away. Both print and ebooks (under Overdrive’s current library model), only as many people can check them out as titles you’ve purchased– so that’s the same, although patrons may be more cranky about the ebooks, since the limitation is just contractual, not obviously material.

. Many public libraries ‘rent’ multiple copies of print books for temporary popular best sellers, at a lower price than buying them outright, and don’t need the publishers permission to do that, just need a ‘rental’ vendor with a business model that works for them. Kindle/Overdrive, no such bestseller plan is available, and such a plan would have to be agreed by publishers and provided from your single source vendor, Overdrive (more vendors may appear as time goes on, or not). Print books a library buys once and owns it permanently (until it falls apart from use). Overdrive books you have to pay yearly to keep (but they won’t fall apart, and you don’t need to pay for storage or couriers).

I’m still curious how the yearly per-title price for Overdrive compares to retail purchase. To compare cost to the library, you’d have to know how long the ‘average’ library book stay on the shelves before falling apart from use. Some print books circulate more than others (so fall apart quicker), but Overdrive it’s all the same, and you pay yearly (it seems) whether it circulated or not. And theoretically you have less internal ‘fixed’ costs with Overdrive, no storage, transportation, shelving, etc. But those fixed costs don’t immediately go down as ebook use rises (unless you can lay off staff right away — those local fixed costs are ‘outsourced’ to Overdrive/ Amazon ).

But a significant over-arching difference is still the ‘outsourcing’ of the costs — and the control. Print books, you can buy retail at the same cost everyone else does, and figure out a business model that is sustainable (which is what libraries have done over decades, settled into it). Ebooks, you’ve got to get a special deal from the publishers and special support — which may or may not be sustainable. The publishers may or may not care if it’s sustainable for libraries, depends how much income they see from libraries, how much business they see _losing_ to libraries (or how much business they think they’ll get from people purchasing after a library checkout

Given the economics of e-books, I would expect:
1. There is significant consolidation in libraries. I expect this mainly will mean lots of smaller local library branches closing.

2. Publishers will have to charge some form of “per loan” fee. Like the publisher charging every 26 loans.

3. There will be some national “premium” libraries that will charge a fee like Netflix to give a wider range of access to titles without waiting.

4. The digital books market will become a 3rd tier of releases later than paperbacks. This will look a lot like Netflix with having a more limited selection of older titles, but it will expand to cover the “long tail” of books. The overall affect will be increased diversity of books available to the average user.

Internet Archive is lending scanned books along with some library partners. As I understand it this means that a book is lent to one patron at a time, while the physical book is not lent. This seems to me the only way forward for ebook lending in libraries. The linked NYT article explains the matter very clearly: ebook lending, if done right, is so easy that there is no incentive to go to the Kindle store. The only “solution” for publishers is to make it difficult. If the Internet Archive/Openlibrary solution is legally permissibile, it seems to me (not that people are listening to me!) the only step forward if libraries wish to lend ebooks. On the other hand, it will antagonize the publishers if very successful.

Erik, do you know any more about IA’s business? What’s their pricing model to libraries? How do they get the rights from rights owners to do this, are they negotiating with publishers directly, or are they an Overdrive reseller, or what? There isn’t much online on their web pages about exactly what they’re doing.

I’m pretty sure IA is not just taking scans of in-copyright books, and loaning them out to library patrons without any agreement with rights owners.

Interesting! Thanks for the press citations, IA itself on their web page isn’t saying much — perhaps this explains why.

Yeah, if it’s only out-of-print, then perhaps they’re just going forward and planning on claiming a fair use defense if they end up in court.

That would be a fairly risky thing to do — recall that the original Google Book Suit was about scan-and-snippets with no full text, and it’s not entirely clear that even that is fair use. The GBS suit wasn’t even about providing full text to users. It would seem even shakier claiming that providing full text is fair use. But I am not surprised if Brewster’s being bold. It’s hard to predict how ANY of this stuff would go in court, but I think most legal experts would NOT give IA very good odds, if that’s what they’re doing.

(And it also makes me wonder why the Author’s Guild chose to go after HathiTrust as the next step, instead of IA! HathiTrust is also just scan-and-search, not even with snippets).

Now, doing that with in-print books would be even that much riskier. Most libraries are pretty risk averse. And while I think it makes sense to take risks sometimes, providing full text of in-copyright works claiming fair use seems rather too risky to me, seems unlikely to prevail in court. Let alone of in-copyright works! The HathiTrust approach of scan-and-search only is still riskier than most libraries would have been willing to do ordinarily, but I think that’s an appropriate move for them. Even snippets like GBS would, I think, be reasonable, but perhaps HT is avoiding snippets to have the best possible case for fair use, to hopefully set some precedent if it goes to trial. But full-text and claim fair use mainly because it’s out of print, perhaps with some support also because you are a non-profit concern? Seems questionable to me. (The fact that something out-of-print can later become in-print is of course an added complication there. Something actually out of copyright doesn’t ever, I don’t think, go back into it though.)

I assume they have done the legal legwork. As far as I can tell the reliance is on loaning the books while keeping the physical copy somewhere where it is not loaned, and on having created the scan themselves. But I am not a lawyer.

Jonathan, thank you for blogging about this important topic. The amount of money being spent by libraries for a small set of books that get “gobbled” up right away, leaving very little for patrons to check out, to me, seems like a losing battle. (Full disclosure: I am a children’s librarian in a large library in a county consortium. We have ebooks and we seem to be spending more money each year for what seems like a big hassle and not very many books. Also, our library has a high usage rate, and so we have to pay more, but many of our users are out of county, and we don’t get compensated for their usage.)

I realize these are “fighting words” but with all the hoops the publishers are creating, I wish libraries would say, “e-books are a great medium, but right now they are not financially feasible for libraries. We are going to use the allocated funds for more [name your favorite library activity] because we feel it better supports our community.”

In the pursuit of all things shiny, should we bankrupt ourselves in the process of trying to serve people that can afford to buy eBooks and eReaders? It’s a sticky situation, with no easy answers.

1) The First Sale Doctrine must be extended to digital content. Publishers will fight tooth and nail to keep it from happening, but a book is a book, regardless of its format (laying aside for the moment the relative ease of copying a digital, versus a paper, copy) , and if libraries are to continue to exist, they must enjoy the same lending rights for digital materials as they do for hard copy. Let’s face it, hard copy is going to be hard to find in a few years, and if libraries are to continue to serve the public, they must move, and be allowed to move, with the times.

2) The only titles available to libraries for lending on Kindles (via Overdrive) are those titles which the library has purchased and which publishers allow, and then they may only loan the title out to one patron at a time (understandably, given the model that is in place). At least two major publishers (Macmillan and Simon and Schuster) do not allow public libraries to purchase and loan their titles at all, either through Overdrive or any other supplier.

3) It is interesting to see no one here mentions Amazon’s Kindle Owner’s Lending Library, now at 67,200+ titles and growing by hundreds of titles or so every day. This is a real threat to libraries, if they are able to assemble a credible and comprehensive list of titles and provide them to Prime customers in a Netflix-type model, libraries will become increasingly marginalized–at great cost to our society.

Thanks Dale, I had not been keeping up with Amazon Kindle Owner’s Lending Library, that is threateningly interesting.

Now, if things made sense, Libraries would be able to subscribe to that same KOLL, at much the same price as individual consumers, for the right to loan out anything in the KOLL to their patrons, one checkout at a time. After all, with print books, libraries can do the same thing, although one title at a time: buy one copy at the same price any consumer pays, and loan it out to as many patrons as they want, one checkout at a time.

Instead, we have diverging products here, the Overdrive kindle lending library is a different thing, with a different collection and different pricing (still mysterious pricing, we don’t really know how much libraries pay per title/year/checkout) than the KOLL.

The loss of the first sale doctrine for ebooks really does imperil library business models, library business models for print were really built on the first sale doctrine. If one role of libraries is communities banding together to purchase titles collectively and share them — there is not neccesarily any less need or desire for that with ebooks, but publishers can make it no longer possible at all, or no longer financially feasible.

Well, Amazon is aiming, ultimately, for a huge lending market (at least the entire English-speaking world), and can afford to purchase multiple copies each of which I am fairly certain they are going to believe they can re-loan, serially, without purchasing again. In other words, I believe Amazon is going to treat some of its KOLL digital book purchases as if they enjoyed First Sale Doctrine rights, and let the courts decide who’s right. But time will tell.

I have written in The End of Libraries what I believe the future MUST hold for eBook lending, which is a Netflix-type model where, whether through an Amazon Prime type commercial product or the public library network, readers can borrow a set number of titles at one time, with no due dates, and no limit on the total number of checkouts in a given period.

I believe, too, that some sort of pay-per-loan method, such as that now in place for Amazon’s KOLL, must prevail as the pricing mechanism. I have described how that could work for public libraries in The End of Libraries as well. That pay-per-loan method will prove irresistible to authors who, remember, are the ones keeping publishers in business. If publishers don’t reform to maximize their authors’ exposure to a reading public–particularly one that is paying to BORROW their books as well as buy them, then they will be shooting themselves in the foot and, ultimately, in the heart.

I am at work on Part VII of The End of Libraries: An Open Letter to All Living Authors, which I hope you will be able to read in a couple of days.

Hmm, I had assumed they had an agreement with the publishers to let them buy it once and loan it multiple times. You don’t need first sale rights if you get permission from the publisher; first sale doctrine rights say you don’t need permission. But Amazon can get permission to do things that libraries can possibly not, due to their scale and power.

I am not entirely sure how pay-per-loan would change libraries, especially public libraries, or if it would be feasible/sustainable. It is definitely not what libraries have done traditionally.

Amazon reportedly stocked KOLL initially in two ways, only one of which involved an outright agreement with publishers. Other titles, the ones they said they would purchase at wholesale for each simultaneous Prime borrower, were apparently put on the list without publisher awareness or agreement. Those are the titles I was referring to.

In a way, public libraries work on a pay-per-loan basis now. They buy a book and, over its lifetime, loan it out to x number of patrons. Divide the cost of the book by x and you have the pay-per-loan cost, distributed, you could say, in quite the same manner Amazon is paying its KDP Select authors.

National statistics indicate libraries pay 25 to 75 cents per loan, which is why I had suggested a 50-cent decrement of an eBook lending budget for the AmPLE program (see The End of Libraries).